CORRECTED-IATA slams 'catastrophic' tax haven ruling in Brazil

(Corrects name of IATA official to Cerda from Cerba in
paragraphs 4, 11, 13)

BRASILIA, Sept 22 (Reuters) - The International Air
Transport Association urged Brazil on Thursday not to list
Ireland as a tax haven, a decision that would increase taxes on
aircraft leases for Brazilian carriers struggling to regain
profitability.

In an effort to dissuade Brazilian companies from moving to
tax havens, Brazil's government announced a week ago it would
add Ireland, Austria, Curaçao and Saint Martin to its list of
countries denominated as such, as of Oct. 1. Brazilian law
requires companies registered in listed tax havens to pay a 25
percent tax rate on their contracts.

IATA, a trade association of the world's airlines, said
Brazil was already a very expensive place for carriers to do
business and the tax ruling would undermine efforts to compete
with rivals in nearby Chile and Argentina.

"It will cause havoc and have a catastrophic impact on the
ability of Brazilian airlines to become financially sound,"
Peter Cerda, IATA vice president for the Americas, said by
telephone from Miami.

Listing Ireland as a tax haven would add 1 billion reais
($306 million) a year to the cost of leasing the aircraft,
according to the Brazilian airline association ABEAR.

ABEAR is hoping to convince Brazil to reverse its decision
or make an exception for aircraft leases, which have been tax
exempt since 1996.

Association President Eduardo Sanovicz met on Wednesday with
tax authorities. He gave them data projecting the costs the
ruling would cause Brazilian carriers, hurting their
competitiveness, he told Reuters by telephone.
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